New Wind Farm Regulations Could Decrease Property Values

Tom Larson |
September 02, 2010

The Wisconsin Public Service Commission (PSC) is proposing new regulations relating to the location of wind turbines and wind farms (a large number of wind turbines located in close proximity to one another) that could have a significant impact on the value of thousands of acres of Wisconsin property. These regulations will determine, among other things, how far wind turbines can be located from neighboring homes, buildings and property lines. Given that wind turbines can be over 500 feet high and the new state regulations will override all local zoning ordinances, REALTORS® and property owners should pay close attention to these regulations.

Background

During the 1970s, the United States experienced an energy crisis due to a decrease oil production in the Middle East. To encourage the use of alternative energy sources, Wisconsin enacted a law prohibiting local governments (counties, cities, villages and towns) from placing any restrictions on the installation or use of solar or wind energy systems unless the restriction is necessary to protect public health or safety. For approximately 40 years, this law has not been a significant problem for property owners.

In recent years, thousands of large wind turbines have been located in Wisconsin and other states to utilize the energy from winds blowing across the landscape. While these turbines are intended to reduce dependence on fossil-based energy sources, they have generated a lot of controversy and complaints from nearby property owners. Some of the complaints from property owners include the following:

Health problems: After wind turbines have been placed nearby, some residents have complained of insomnia, anxiety, headaches and nausea. They have blamed their health problems on the pulsing noise coming from spinning turbines near their homes.

Destruction of natural viewscapes: Turbines can be over 500 feet tall and can be seen from miles away. (As a comparison, the Wisconsin Capitol is 284 feet tall.) Some feel that these turbines detract from the natural beauty of Wisconsin’s farms and rolling landscape.

Noise: Depending on the turbine model and wind speed, wind turbines can create a constant "whooshing" or pulsating noise that can be heard both inside and outside a home (day and night), if located too close. Studies have shown that an average-size turbine (2 megawatts, 100 meters high) located 1,000 feet away can produce the same amount of noise as a suburban area during the day (51 decibels).

Excessive shadows on neighboring property: Depending upon the number of clouds and angle of the sun, wind turbines can create a "shadow flicker" (a term used to describe the shadow of the turning blades as it hits a surface) on nearby property. Some property owners have described the shadow effect on their home as being like "someone turning lights on and off inside the house at a rate of 80 times a minute" and lasting for almost an hour on sunny days.

Property values: A recent study of three Wisconsin wind farms showed that prospective buyers had a negative perception of nearby wind turbines. While the exact impact is difficult to quantify, the study indicated an average decrease in vacant residential property values ranging from 12 percent to 40 percent, depending on the size of the lot and the distance from the wind turbine.

Proposed PSC regulations

In 2009, Wisconsin enacted a wind turbine siting law that directs the PSC to develop specific standards for, among other things, wind turbine setbacks from neighboring homes and property lines. The PSC formed a 15-member wind siting council, consisting of representatives from wind farm companies, local governments, environmental organizations, private property owners and REALTORS®.

After two months of regular meetings, the wind siting council recently completed a report containing various recommendations and submitted it to the PSC for approval. The report is controversial and many critics maintain that the interests of neighboring property owners are not adequately protected due to the makeup of the council, which was weighted in favor of wind energy interests.

The PSC has used this report to create new administrative rules, which are also controversial. Some of the specific concerns with the proposed rules include the following:

Setbacks are too small: The proposed setback from neighboring residences and buildings is 3.1 times the maximum blade tip height of the turbine. For example, if a wind turbine is 300 feet, the setback is 930 feet from a structure. This distance was chosen for safety considerations (in case the turbine falls over) and ignores possible health risks to humans and animals and the potential impact of turbines on neighboring property values. Critics suggest that a setback of 2,640 feet is more appropriate.

Noise standards are insufficient: The proposed rules allow wind turbines to create noise up to 45 decibels at night or 50 decibels during the day, as measured from the outside of a neighboring residence.

Shadow flicker limits are inadequate: The proposed rules allow wind turbines to create a shadow flicker on neighboring residences up to 40 hours per year. If shadow flicker exceeds 20 hours per year, developers must offer mitigation to property owners.

Why this is important for REALTORS®

Without question, the number one reason REALTORS® should care about the proposed wind farm regulations is the impact of wind turbines on property values. Numerous studies have shown that wind turbines can have a negative impact on neighboring property values and sometimes that impact can be significant. According to a survey of REALTORS® working in a wind turbine area, the impact on neighboring vacant land ranges from a 43 percent decrease if the wind turbine is located very close (within 600 feet) to 29 percent if the turbine is located in near proximity (½ mile away). With respect to the impact on improved property, the impacts are believed to be similar, but slightly lower (39 percent and 24 percent, respectively).

While wind turbines are often seen in more rural settings, these regulations do not prevent wind turbines from being located in more urban or suburban settings. Because these regulations override local zoning ordinances, wind turbines can be located almost anywhere there is adequate wind, including next to residential subdivisions and office parkss.

While developing alternative energy sources is important, so too is protecting property values. Without adequate setbacks in place, property values could suffer and property owners could face tremendous uncertainty about whether the neighboring property that is used for open space or farmland today will be used for a wind farm with large wind turbines tomorrow.

What’s next

The PSC recently approved the proposed administrative rules and now the rules must be reviewed and approved by the Wisconsin Legislature. The PSC rules will likely be completed within the next several weeks, with legislative review occurring shortly thereafter. The legislature will likely hold public hearings within the next several weeks.

The WRA will be meeting with key legislators in an effort to make changes to the rules to ensure that the interests of property owners are adequately protected.

For more information, please contact Tom Larson at tlarson@wra.org or at 608-240-8254.

Tom Larson is Chief Lobbyist and Director of Legal and Public Affairs for the WRA.